A decrease in the Retained Earnings account is recorded with a debit.

Name: A decrease in the Retained Earnings account is recorded with a debit.
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Question

Quizplus · Accepted Answer

Retained Earnings is a shareholder's equity account, and a decrease in this account represents a reduction in the company's earnings that are being kept for future use. Since debit entries increase asset accounts and decrease liability and equity accounts, a debit entry is used to record a decrease in the Retained Earnings account.

A Decrease in the Retained Earnings Account Is Recorded with a Debit